Yara International ASA Third Quarter results 2013 18 October 2013 - PowerPoint PPT Presentation

0 Yara International ASA Third Quarter results 2013 18 October 2013 IR-Date: 2013-10-18

1 Summary third quarter Strong results despite weaker commodity fertilizer markets  17% increase in deliveries including Brazil acquisition  Robust value-added premiums  Stable NPK deliveries outside Europe  Strong Industrial deliveries, especially NO X abatement  IR-Date: 2013-10-18

2 Earnings per share* 12.86 EPS excluding currency and 12.42 special items 11.84 10.54 9.82 10.02 9.25 8.04 6.68 7.73 7.67 6.68 5.42 5.65 5.27 2010 2011 2012 2013 Annual NOK 30.23 41.99 37.31 20.38 * Average number of shares for 3Q 2013: 277.6 million (3Q 2012: 281.4 million). IR-Date: 2013-10-18

3 Fertilizer market development Solid farm economics support fertilizer demand, despite lower grain prices  Increased exports from China led to supply-driven urea pricing  Western Europe nitrogen fertilizer industry deliveries 9% lower  Phosphate and potash markets impacted by reduced consumption in India,  but compound NPK markets running well globally Strong demand for value-added fertilizer products, including nitrates and  NPKs IR-Date: 2013-10-18

4 Solid farm economics support fertilizer demand FAO price index Index 300 250 200 150 100 50 0 1/2004 1/2005 1/2006 1/2007 1/2008 1/2009 1/2010 1/2011 1/2012 1/2013 Cereals Price Index Cereals 5 year avg. Food Price Index Food 5 year avg. Source: FAO IR-Date: 2013-10-18

5 Strong global urea demand, but increased export availability from China Global urea trade Chinese urea exports Kilotons USD/t 40.3 1 800 450 36.9 +6.4 33.9 1 600 400 31.4 1 400 350 27.8 1 200 300 1 000 250 800 200 600 150 400 100 389 251 350 448 378 200 50 0 0 08/09 09/10 10/11 11/12 12/13 Jul- Sep- Nov- Jan- Mar- May- Jul- Sep- 12 12 12 13 13 13 13 13 xxx Average urea price, fob Black Sea Urea price Chinese exports IR-Date: 2013-10-18

6 Cautious start to season in Europe and US USA* Western Europe Million tons Million tons 4.5 -17%* 2.5 4.0 2.0 3.5 -9% 3.0 1.5 2.5 2.0 1.0 1.5 1.0 0.5 0.5 0.0 0.0 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 Production Net imports Domestic Imports *July only, due to non-availability of more recent US trade data Source: Yara estimate for fertilizer deliveries to selected West European countries. US nitrogen deliveries based on TFI, US Trade Commission, Blue-Johnson and Yara estimates* IR-Date: 2013-10-18

Long-term growth in NPK deliveries outside 7 Europe; stable year-over-year development Yara-produced NPK deliveries Overseas Yara-produced NPK deliveries Kilotons Kilotons 1,400 271 1,200 237 1,000 198 800 600 95 86 76 400 73 72 68 64 CAGR 64 54 18% 200 18 15 14 0 3Q09 3Q10 3Q11 3Q12 3Q13 Asia Brazil Latin Africa North America excl. America Brazil Overseas Europe 3Q11 3Q12 3Q13 IR-Date: 2013-10-18

8 Record production Ammonia Finished fertilizer Kilotons Kilotons 2,000 5,000 1,900 4,500 1,800 4,000 1,700 3,500 1,600 3,000 1,500 2,500 1,400 2,000 1,500 1,300 1,000 1,200 500 1,100 0 1,000 2011 2012 2013 2011 2012 2013 * Including share of equity-accounted investees IR-Date: 2013-10-18

Bunge acquisition completed 9 and integration underway Bunge Yara Fertilizantes Brasil Sales volume 2012 (mt) 4.6 3.3 Revenues 2012 (USD billions) 2.6 1.8 Employees ~1,300 ~1,300 SSP production units 2 1 Blending units 22 11 Own sales force ~100 ~80 Sales representatives ~500 ~300 IR-Date: 2013-10-18

Bunge acquisition improves 10 geographical balance 2012 Fertilizer deliveries, Yara and Bunge Brazil Europe 9.6 mill. tons North America 3.0 mill. tons Asia 1.9 mill. tons Africa 1.2 mill. tons Bunge 4.6 mill. tons Latin America Oceania 4.7 mill. tons 0.3 mill. tons IR-Date: 2013-10-18

11 Significantly improved footprint in Brazil 1,000 km Bunge plant ~60 USD/t Yara plant Market size Northeast Mato Grosso West Bahia Minas Gerais Paraná São Paulo Rio Grande do Sul IR-Date: 2013-10-18

12 Bunge acquisition increases purchasing scale Potash purchases, China, India and Yara 2012 First half 2013 Million tons, MOP equivalents 5.3 1.1 3.9 2.8 0.6 1.9 1.8 1.0 China India Yara China India Yara Bunge Source: Yara, International Fertilizer Industry Association IR-Date: 2013-10-18

Earnings before interest, tax, depreciation and 13 amortization (EBITDA) NOK millions EBITDA excluding special items 6,587 5,444 4,966 4,982 4,310 4,281 3,995 4,103 4,129 3,591 3,455 3,251 3,307 2,992 2,486 2010 2011 2012 2013 Annual NOK 15,315 18,163 16,970 11,432 millions IR-Date: 2013-10-18

14 EBITDA development NOK millions 145 174 4,103 924 1 3,307 269 79 EBITDA Special Volume Price/margin Gas & oil Other Currency EBITDA 3Q12 items costs in 3Q13 Europe IR-Date: 2013-10-18

15 Strong earnings in Downstream and Industrial NOK millions 3,077 EBITDA excluding special items 1,799 1,094 766 291 239 Downstream Industrial Upstream 3Q12 3Q13 IR-Date: 2013-10-18

16 Net income from equity-accounted investees NOK millions 412 3Q12 3Q13 132 130 85 73 33 20 16 14 -78 Qafco Tringen GrowHow UK Lifeco Other IR-Date: 2013-10-18

17 Increased fertilizer deliveries Kilotons 1,380 1,336 1,305 1,111 1,094 1,032 988 706 258 216 3Q12 3Q13 3Q12 3Q13 3Q12 3Q13 3Q12 3Q13 3Q12 3Q13 Nitrate NPK compounds NPK blends Urea UAN Yara-produced deliveries Joint venture & third party sourced Total IR-Date: 2013-10-18

18 Yara stocks, including Bunge Brazil from 3Q Kilotons Finished fertilizer 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 Other NPK Nitrates Urea Bunge IR-Date: 2013-10-18

19 Farmer yield benefits justify nitrate premium Nitrate premium, USD/t CAN Nitrogen upgrading margins USD/t 700 160 140 600 Nitrate premium above urea 120 500 100 Value 400 above ammonia 80 300 60 Value above gas 200 40 100 Yara EU gas cost *20 20 0 0 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 Urea CFR CAN (46% N) NH3 CFR (46% N) IR-Date: 2013-10-18

20 Stable NPK premiums Phosphate upgrading margins NPK blend premium USD/t USD/t 700 700 600 600 Margin above Value above blend cost 500 500 raw material 400 400 Urea, fob Black sea NH3, fob Black Sea *0.22 300 300 MOP, cfr NWE 200 200 Rock, fob NA *1.4 DAP, fob Morocco 100 100 0 0 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 DAP, fob USG NPK T17, del France IR-Date: 2013-10-18

21 Strong cash generation NOK millions 70 3,519 229 360 732 1,117 741 2,309 4,295 702 626 331 Net debt Cash Dividends Net Funding Acquisition Other Yara Share Yara FX loss Other Net debt Jun 13* earnings** from equity operating Yara of Bunge investments buy backs / Dividend Sep 13* accounted capital Pilbara net redemption investees change Nitrates of shares * Included in net interest-bearing debt are external bank time deposits (4-12 months), this is part of other current assets in balance sheet ** Operating income plus depreciation and amortization, minus tax paid, net gain/loss on disposals, net interest expense and bank charges IR-Date: 2013-10-18

22 Prospects Continued strong farm economics support fertilizer demand  Marginal urea profitability in China; Chinese coal price and export tax  regime are key for global urea pricing going forward Capacity outside China: limited greenfield additions next 2-3 years apart  from Algeria Limited pipeline stocks in Europe; improved Yara nitrate deliveries following  North African urea price increases and new Yara nitrate prices Potash and phosphate market volatility has limited impact on compound  NPK deliveries IR-Date: 2013-10-18

Potential joint investment in world-scale 23 ammonia plant on US Gulf coast Attractive long-term partnership:  BASF has strong existing presence in the United States and ammonia – sourcing requirement for US downstream activities, investment would further strengthen backward integration Yara has a strong global ammonia production and trade network, investment – would further strengthen this position, and increase its North American upstream presence US Gulf location advantageous due to existing industry infrastructure,  construction resources and natural gas Location, capacity and other project parameters currently under  discussion IR-Date: 2013-10-18

24 Additional information IR-Date: 2013-10-18

25 Fertilizer volumes Kilotons 7,000 6,343 6,284 6,104 6,017 5,884 6,000 5,474 5,296 5,438 5,299 5,256 5,179 5,253 5,210 5,216 5,129 5,013 5,045 4,970 4,834 4,914 4,882 5,000 4,791 4,763 4,742 4,759 4,239 4,000 3,496 3,000 2,000 1,000 0 2007 2008 2009 2010 2011 2012 2013 Europe Outside Europe Total IR-Date: 2013-10-18